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Thursday, Guggenheim analysts adjusted their outlook on Neogen Corporation (NASDAQ:NEOG), reducing the price target to $13.00 from the previous $15.00 while maintaining a Buy rating on the stock. Currently trading at $5.02 with a market cap of $1.09 billion, the stock has seen significant volatility recently, with InvestingPro data showing a 38% decline in the past week alone. The modification follows a series of mixed updates from the company, with the latest report reflecting both positive developments and challenges.
Neogen has reported that their sample collection business is progressing on track as the third fiscal quarter concludes, overcoming a year-to-date drag of $25 million for 2025. The company maintains strong liquidity with a current ratio of 3.77, and generates annual revenue of $913.83 million. Additionally, the company's Petrifilm product line is expected to commence initial production in the upcoming fall season. These highlights represent the positive aspects of Neogen's recent performance.
On the other hand, the company has once again revised its revenue and EBITDA guidance downward, indicating a continued struggle in financial growth. The analysts noted a softer macroeconomic environment through February, which presents a difficult setting for Neogen to increase volumes amid the unfolding realities of tariff uncertainties.
Guggenheim's analysts believe that despite the current challenges, a post-integration Neogen with potential for growth is on the horizon. However, they also acknowledge that the recent change in CEO and the uncertain macroeconomic conditions could prolong the period of erratic growth in the near term.
The analysts concluded that while they remain patient with the growth prospects within Neogen's portfolio, it is necessary to adjust the price target to reflect the latest developments. According to InvestingPro analysis, the stock appears undervalued at current levels, with 12 additional ProTips available for subscribers. The reiteration of the Buy rating signals Guggenheim's continued confidence in the company's long-term potential despite the short-term headwinds. For deeper insights into Neogen's valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Neogen Corporation reported its fiscal Q3 2025 earnings, highlighting an unexpected rise in earnings per share (EPS) but a shortfall in revenue. The company posted an EPS of $0.10, surpassing the forecast of -$0.01, while revenue reached $221 million, falling short of the expected $232.36 million. Despite the positive EPS results, the revenue miss contributed to a negative market reaction. Neogen has set a full-year revenue outlook of approximately $895 million and an adjusted EBITDA outlook of around $195 million. The company is focused on restructuring its genomics business and managing costs to navigate the challenging market conditions. CEO John Audent announced his resignation, emphasizing the company's strategic focus on improved execution. Neogen's leadership team is undergoing changes, with new appointments in research and development and commercial roles. The company is also progressing with its integration efforts, particularly in its Petri film production.
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